Beware of "Title Pirates"This New Real Estate Scam Could Cost You BIG Money
www.housebeautiful.com
Jump to: This real estate inquiry started like most do: A seller reached out over email, expressing interest in putting up a piece of vacant land for sale, recalls Katie Hanner, a licensed realtor and broker owner of Thrive Realty in the Austin suburbs. The list price he suggested was slightly under market value, just enough to attract an interested buyer for a fast sale, but not so low that it would raise eyebrows.Again, nothing that seemed wildly unusual, Hanner says. In todays world, plenty of real sellers start conversations over email, text, or through an agents websiteits how we do business. But her intuition that something was off kicked in when the seller wouldnt meet in person or take a phone call. So, Hanner drove out to the property in Leander, a suburb of Austin, and thats when everything unraveled: The land she was being asked to sell was next to other vacant lots all owned by the same person. She was able to track down the actual owner who had a home on an adjacent lot and knew nothing of the potential sale, and, in fact, had no intent to list the lot. Left unchecked, a buyer could have wired hundreds of thousands of dollars to a fake seller, and the title insurance agency could have been on the hook to pay for the expenses.Title piratesscammers who hijack property ownership to make quick, illegal salesare becoming an increasing concern, particularly as real estate transactions shift to digital platforms, according to Hanner. This type of scam highlights a significant vulnerability in public records and raises an important question: why is it so easy for bad actors to steal a property title in the first place?Heres what real estate experts want you to know about how to spot this fast-growing scam.Related StoriesHow Do Title Pirates Steal Titles? The majority of people who are looking to buy a home set up showings at for-sale homes and tour open houses with their real estate agents. Theres usually no question as to who owns those homes. The title pirate scam, though, has historically been more likely to affect investors looking to buy up land, out-of-town buyers doing a sight-unseen purchase, or those who are looking to buy a lot for a new-build home. Vacant land, second homes, rental properties, or any home where the owner isnt actively present has been the prime target for title pirates, Hanner says. But, according to the real estate professionals I talked with, title pirates have become increasingly brazen in recent years. Los Angeles real estate agent Wesley Kang, founder of Realtor 1099Cafe, said one of his clients was going through a divorce and, during the chaos, a scammer monitoring county records filed a fake deed on the couples house: Theyre getting scary sophisticated, he says.So, how can a scammer get ahold of your homes title so easily? These scammers grab your information off public records, fake some signatures, pay off a sketchy notary, and boom, they've bought your house or land on paper, Kang says. Unfortunately, once that fake deed gets filed, it can appear like the real deal to banks, title officers, buyers, and real estate agents.Related StoryHow Common Is Title Fraud?Title fraud is on the rise. In 2023, the FBI received about 900,000 complaints of real estate-related crime, and, of these, more than 9,500 were for title fraud, according to the FBI Internet Crime Report that David Zawadzki, executive vice president of business development of Chicago-based Proper Title, points to. These scammers, he says, are working around the clock to find any weaknesses in the homebuying and selling process, and their techniques get more sophisticated as theyre using AI to generate fake documents that are harder to detect, Zawadzki says. It takes an extremely vigilant title insurer that stays educated on the latest techniques to spot these scammers, he says.In Florida, Kevin Tacher, founder and CEO of Independence Title, has become a pro at catching title thieves, working alongside FBI agents and the state attorney on fraud cases. In a 2018 sting, a title pirate forged a warranty deed and posed as the seller of a property. Tacher immediately noticed red flags in the paperwork, such as a mortgage that had been paid off six years before it was recorded with the county clerk. The scammer refused to connect Tacher with the actual homeowner who he purportedly was representing.On months when Tachers team handles 50 to 75 closings, he estimates that five to seven of these are scams he successfully flags and prevents. As part of their due diligence, his team sends letters to the property owners registered address to verify the legitimacy of the sale. They also perform reverse phone number searches to catch any discrepancies.Related StoryWhat Are the Red Flags of This Property-Selling Scam?While title pirates have become more sophisticated, there are some red flags you and the professionals involved in a real estate deal can be on the lookout for, according to Jennifer Haskins, an attorney at McCarthy Law in East Greenwich, Rhode Island. Her firm focuses on estate planning, real estate, and elder law. Here are some potential indicators of title fraud, according to Haskins:1. The seller is not willing to meet in person.If someone refuses to meet with you in person or does not want to give you a tour of the property, then there is a good chance that they may not actually have the authority to sell that property.2. 'Agents' who are not licensed.If the party claims to be a real estate agent, you can research their company to determine whether it seems legitimate and call the company directly, asking to speak to the individual that you have been discussing the sale with.3. Low sale prices that seem too good to be true.Scammers often lure victims in with enticing deals and great prices that seem too good to be true. If the price is surprisingly low or the agent makes promises of extremely favorable financing, they may be trying to scam you.4. The seller is not willing to provide details of the property when asked.Whether they are claiming to be the homeowner themselves or a real estate agent, any seller should know and be able to provide information about the property that is available to them. If the seller cannot answer basic questions about the property, this may be cause for concern.5. There's a strong urgency to close quickly.Having a strong sense of urgency may be one of the clearest indicators of a scam. While there may be some legitimate reasons for a homeowner to want to sell their property quickly, if they are not allowing you to conduct reasonable checks, then you should take a step back and examine their legitimacy more carefully. You should be able to tour the property, request a third-party inspection, and ask detailed questions about the history of the property at the very least.Another red flag Tacher has noticed is that scammers often insist on using their own notary instead of one vetted by the title company. The scammer will often come up with excuses about why theyre unavailable to the notary, such as being out of the country or at the hospital with a family member.Related StoryHow Are Title Pirates Stopped?Weve got to slow down just enough to ask the questions scammers dont want us to ask, Hanner says. That means insisting on phone calls and video verification, verifying identities through multiple sources, comparing signatures with county records, cross-checking seller details, and involving trusted title companies that know what to look for.And if a seller pushes backif they refuse to meet, refuse to verify, refuse to follow standard proceduresthats not just a red flag; thats a deal-breaker, she says.Follow House Beautiful on Instagram and TikTok.
0 Commentarii ·0 Distribuiri ·62 Views